The UK’s financial exercise expanded by 0.1% month-on-month in August 2025, reversing a revised 0.1% contraction in July, as manufacturing output offset weak point in different sectors of the financial system.
Key Factors from the August GDP Report
- Month-to-month GDP grew 0.1%, according to consensus expectations, following a downwardly revised -0.1% decline in July (beforehand reported as flat)
- Manufacturing sector led the enlargement with a 0.4% improve, whereas companies was unchanged at 0.4%, and development fell by 0.3%
- Three-month rolling GDP development accelerated to 0.3% (June-August) from 0.2% within the three months to July, suggesting modest underlying momentum
- Annual GDP development eased to 1.3% from 1.5% in July, indicating some lack of momentum on a year-over-year foundation
- Providers remained a important development driver over the three-month interval, increasing 0.4%, with development including 0.3% whereas manufacturing fell 0.3%
Hyperlink to the August 2025 ONS GDP Month-to-month Estimate
The combined sectoral efficiency highlighted the uneven nature of the U.Okay.’s financial restoration.
Whereas the headline determine met expectations, the flat companies studying was regarding, on condition that the sector accounts for roughly 80% of the U.Okay. financial system. The downward revision to July’s knowledge additionally instructed the financial system had much less momentum coming into the third quarter than initially thought.
Market Reactions
British pound vs. Main Currencies: 5-min
Overlay of GBP vs. Main Currencies Chart by TradingView
The pound, which had been taking cues from countercurrencies, dipped throughout the board when the report hit, although losses had been shallow. It fell probably the most in opposition to the stronger Aussie, however largely stayed inside 0.10% an hour after the discharge. Thirty minutes later, the transfer light, and the forex began climbing once more.
Easing political jitters in France and renewed deal with a potential Fed charge lower boosted threat urge for food in Europe, giving GBP a carry earlier than the US session pulled it in several instructions.
The European session’s positive aspects additionally recommend that markets had positioned for probably weaker knowledge, making the in-line studying a aid. Moreover, the truth that the financial system returned to development after July’s contraction helped ease instant recession fears, despite the fact that the underlying image remained combined.
By the top of the day, the pound completed combined, buying and selling decrease in opposition to the euro, franc, and yen, however stronger versus the greenback and commodity currencies just like the Aussie, Kiwi, and Loonie.
